On August 19, the FCC’s Wireline Competition Bureau released a public notice establishing the process for applying for support under the Rural Broadband Experiments program. Applications under this program must be submitted via the FCC’s online auction system and will be due no later than 6 PM (EST) Tuesday, Oct. 14.

As described in our prior advisory, the Rural Broadband Experiments program will disburse up to $100 million for competitive providers (such as competitive local exchange carriers, cable operators, fixed wireless ISPs or other entities) to deploy broadband networks in high-cost, unserved areas. The FCC implemented this program in its Technology Transitions Order in order to determine the most cost-effective way to direct support to competitors to deploy broadband infrastructure in unserved areas. The results from these experiments are expected to guide the Commission as it begins to develop the competitive bidding process for directing Connect America Fund (CAF) Phase II support to competitive providers.

A July FCC order set the budget for this program at $100 million, with $75 million reserved for projects that can offer 25 Mbps downstream and 5 Mbps upstream (category one); $15 million for projects offering 10/1 Mbps service (category two); and $10 million for projects in extremely high cost areas that would provide 10/1 Mbps service (category three). In that order, the FCC determined that winning bids will be selected on a single criterion: cost-effectiveness. The recent public notice provides several additional details, including:

Applications will be ranked from the most cost-effective, to the least cost-effective, within each funding category.

The most cost effective bids will be selected for each funding category, until the budget for that funding category is exhausted.

Winning bids will be made public after the selection process has concluded; however, all other bids will remain confidential.

Applicants may submit multiple bids, but may not submit more than one application.

Applicants will be required to comply with ownership disclosure requirements, and disclose all parties in interest.

Entities interested in participating in the Rural Broadband Experiments must submit their bids on FCC Form 5610, which must be filed on the FCC’s new online Auction System by 6:00 p.m. ET on Oct. 14, 2014. Form 5610 should be accompanied by a formal bid proposal that identifies the census blocks the entity proposes to serve, the category of funding requested, and the total support amount requested for the project. Proposals should also describe the services to be offered, any Lifeline or other low-income discount to be offered, as well as the technologies to be used and the number of locations that will be served.

However, as noted above, the final determination of winning bids will be based solely on cost-effectiveness, with a single caveat: projects seeking to serve Tribal census blocks exclusively will receive a 25 percent “bidding credit.” All bids must be at or below the model-estimated support calculated for each census block as described in the Rural Broadband Experiments Eligible Areas Public Notice.

In addition to the overall budget caps described above, the Bureau has announced that any given applicant may receive no more than $20 million per category one project, $7.5 million per category two project, and $5 million per category three project. Each applicant is also subject to an overall cap of $20 million.

Finally, the Bureau has decided to use the list of unserved census blocks released for the Connect America Fund Phase II process for the purposes of determining which census blocks are unserved for the Rural Broadband Experiments. This list will be revised following the conclusion of the Phase II Challenge process. However, participants in the Rural Broadband Experiments bidding program will not be given a separate opportunity to challenge the designation of census blocks.

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The rural broadband experiments are on an accelerated timetable, with applications due Oct. 14, 2014, and interested potential applicants should move quickly.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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